Gold discounts in India jumped to a
record this week as a sharp import duty hike slowed demand and
triggered investor selling, while investment demand kept Chinese
premiums firm.
Dealers in India quoted discounts of up to
$207 an ounce over official domestic prices this week, inclusive
of 15 per cent import and 3 per cent sales levies, up from the previous week’s
discounts of up to $15 an ounce and premiums of $6.
The sudden price rise prompted investors to sell, while
jewellers and retail buyers stayed on the sidelines, said a
jeweller based in Hyderabad.
Earlier this week, India raised import tariffs on gold and
silver to 15 per cent from 6 per cent. The world’s second-largest consumer of
gold also tightened rules for duty-free gold imports for
jewellery exports by capping imports at 100 kilograms per
licence.
Domestic gold prices in India were trading around ₹1,60,500 per 10 grams on Friday, after rising to ₹1,64,497 earlier this week, the highest in more than two months.
Gold discounts jumped to unusually high levels as demand
virtually disappeared and scrap supplies increased, said a
Mumbai-based bullion dealer.
“Firmer demand from China will likely counter India’s weaker
demand after the latter’s policy changes,” ANZ said in a note.
In top consumer China, bullion traded at premiums of $15 to $20 an ounce over the global benchmark
price, largely in line with last week’s premiums of $14 to $20.
Premiums remained steady this week, supported by resilient
investment demand and aggressive industrial buying, said Bernard
Sin, regional director of Greater China at MKS PAMP.
“Import restrictions remain a key constraint, though
loosening is widely anticipated soon. Industrial stockpiling by
solar and electronics firms is particularly aggressive,
amplified by the removal of VAT (value-added tax) export
rebates,” he said.
Spot gold prices have declined 2.8 per cent so far in the
week, as higher energy prices fuelled inflation concerns and
reinforced expectations of prolonged higher interest rates.
In Hong Kong, gold traded at par to premiums
of $2, while in Japan, gold was sold at a discount
of $0.50. In Singapore, gold was sold at premiums
of $1 to $3.30.
($1 = 95.94 Indian rupees)
Published on May 15, 2026
